Casinos pitched closer to New York City worry promoters of proposed gambling resorts in Catskills

In this May 9 photo, Woodbury Common Premium Outlets is seen in Woodbury. Four New York casino licenses being granted this year will be for the express purpose of economic development upstate. One proposed Orange County casino would near the outlet mall that draws 13 million visitors a year.
Mike Groll — The Associated Press

In this May 9, 2014 photo, vehicles are parked at Woodbury Common Premium Outlets in Woodbury.
AP Photo - Mike Groll

WOODBURY >> Ailing areas of the Catskills finally close to landing a casino after decades of trying could be looking at sharing the jackpot with casinos closer to New York City.

Five of the 22 development groups that paid a $1 million application fee said they were looking at Orange County, within the edge of the city’s commuter belt. Big-name operators such as Caesars Entertainment and Genting Group believe a casino on the outskirts of the nation’s largest metropolitan region could win big.

But it also would siphon business from any companion casino built in the heart of the Catskills — a less prosperous area explicitly mentioned by Gov. Andrew Cuomo and others as an intended beneficiary of New York’s gambling expansion.

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With final bids due June 30, the state board choosing casino sites could be weighing applicants in prime locations against those offering help in needier areas like the Catskills’ Sullivan County.

“When you look at the kind of bright, shining city Orange County is versus what Sullivan County is, clearly the need is in Sullivan County,” said Charles Degliomini of Empire Resorts Inc., which wants to build a $750 million resort about 90 miles northwest of New York City with Kansas City, Mo.-based EPR Properties.

The gambling expansion amendment to the state constitution approved by voters in November was promoted as an economic boost for the three upstate regions that will get the first four casinos: Catskills/Hudson Valley, the Capital region and Southern Tier/Finger Lakes. The governor said last year that casinos would create good-paying jobs “where we need it most.”

A top location from the get-go was the Catskills, where locals had been trying to land casinos since tourism from the old Borscht Belt era dried up. Cuomo flew to the heart of the old region the day after the referendum vote to tell an enthusiastic crowd the expansion would “fundamentally change the trajectory of the Catskills.”

“If we don’t have something around here for people to get their lives in order, we’re going to be in trouble, without a doubt,” said William J. Rieber Jr., supervisor of the Sullivan County town of Thompson.

Another proposed location is at the former Nevele Resort in the Ulster County town of Wawarsing.

Now, it’s possible the Orange County proposals unveiled last month could change the trajectory of the casino siting process. While five groups expressed interest in Orange County, that number could change if bidders team up or pull out. Full refunds of the $1 million fee are available through Monday.

Casinos in Orange County communities like Tuxedo, where Genting wants to build, or Caesars’ pick in Woodbury would be roughly an hour from Manhattan — a potentially huge advantage in a crowded market. Caesars and developer David Flaum want to build a casino by a commuter rail station and Woodbury Common Premium Outlets, a massive shopping center that draws 13 million visitors annually.

“We think there are not many locations in the United States that are better than this location,” said Jan Jones Blackhurst, a Caesars vice president.

While Orange County is usually considered upstate, it has a downstate flavor. The county’s suburbanized southern end is home to communities inhabited by city police and firefighters who endure longer commutes for more affordable housing.

The county’s population increased by about 10 percent since 2000, even as other upstate areas flat-lined. The county’s unemployment rate hovers below the rates for the state and Sullivan County.

Members of the state’s Gaming Facility Location Board, which will make selections this fall, must base 70 percent of their decision on “economic activity and business development factors,” such as maximizing revenue and jobs.

Blackhurst said the Caesars location will create more jobs because the revenue potential is so much greater. Empire Resorts’ Degliomini argues that dollars spent in Sullivan County communities would have a larger impact than dollars spent in Orange County communities. While the law allows two casinos to go in the region, there is concern that potential Sullivan County investors would be leery if a casino is approved closer to the city.

“The Catskills have been thought to be the target for this the whole time,” said John Sabini, former chairman of New York’s Racing and Wagering Board. “And If something opens up in Woodbury, it really diminishes any value to any Catskill license.”